What metrics are essential to track when building your VC network?

Building a robust VC network involves tracking various metrics beyond the initial contact and investment stages. Here are some additional metrics to consider: 8. Quality of Interactions: Assess the depth and quality of your interactions with VCs. Are the conversations meaningful and aligned with your investment focus? 9. Response Time:Track the time it takes for VCs to respond to your outreach. Faster responses may indicate higher interest or engagement. Regularly analyzing these metrics and adapting your networking strategy accordingly can contribute to the growth and effectiveness of your VC network.

Although most founders think it's a numbers game, I disagree with this. Its important to spend time conducting research prior to outreach to your target VC partners. Most VCs prefer that you are introduced, and while its understandable that a first time founder will not have the network to be introduced to your target VCs, what founders can do is personalize their outreach to the right VC partners.

Don't confuse motion for progress. Yes, it's a numbers game but do your due diligence before you randomly blast a template email to investors. I invest in A+ rounds, but I still get endless decks from pre-seed startups. Those founders might include me in this metric but they're inflating because they're an automatic pass..

The dirty secret of startup fundraising is prioritising quality over quantity—and here’s how. Many fundraising Founders complain that they don’t know any VCs or that Investors don’t reply to their (cold) emails. Instead, they should identify 15 to 25 potential Investors (Angels, specific VC firm partners, etc.) who are already active in their industry, and get obsessed at getting in front of them. Once the targets are clear, finding the link who can introduce them becomes easier.

It's a numbers game for sure but don't use the spray-and-pray approach. Use information on LinkedIn, Crunchbase, Pitchbook, etc. to categorize every VC, fund, etc. in specific tiers and be sure that their investment thesis (stage, industry, geographical focus, etc.) aligns with your actual status quo.

More than the number of VCs, focus on the VCs relevant to your industry and geography of operation. Focus on quality over quantity. Don’t send out generic cold emails. Customise it based on who you are writing to. Your subject line matters. Be specific & appreciative. E.g. Seeking your expert advice on my gaming startup

Beyond counting responses, startups should analyze the quality of interactions. Are VCs asking insightful questions? Are they offering constructive feedback? After initial responses, timely and strategic follow-ups are key. Tailoring communication based on the VC's initial feedback can enhance engagement quality. Understanding each VC's investment thesis and aligning outreach to match their interests can significantly increase response rates and meaningful interactions. Use analytics tools to track response patterns and optimize outreach strategies accordingly.

Develop a quotient to measure the quality of engagement with responsive VCs. Consider aspects such as the depth of discussions, the level of curiosity about your innovations, and the degree of strategic alignment in their feedback.

tracking the number of VCs who responded to your outreach is an important step in evaluating the effectiveness of your fundraising efforts. It provides a measure of your level of engagement and traction, which can help you build rapport and trust with potential investors. Here are some additional metrics to consider alongside the number of VCs responded: - Investment interest - Conversion rate - Quality of responses - Response rate By tracking these metrics in conjunction with the number of VCs responded, you can gain a comprehensive understanding of your fundraising progress and identify areas for refinement

Change How You Talk to VCs: If VCs aren't answering your emails or meeting with you, try a different way of talking to them. Learn about what they like to invest in and mention those things in your emails to get their attention. Meet More People: Go to events where you can meet VCs, like business conferences or startup meetups. Use LinkedIn too. Meeting more people can help you find VCs who might be interested in your ideas. Keep Track of Responses: Pay attention to how VCs respond to you. Write down their advice and what parts of your startup they like. This helps you understand which VCs might be a good match for your business.

Also track follow-up conversions after meetings, your ability to keep the conversation going is crucial for truly capturing a VC's interest long-term.

Alongside the number of follow-ups, measuring the response quality, such as the depth of feedback or engagement in discussions, can offer valuable insights. Utilizing Customer Relationship Management (CRM) systems to track and analyze follow-up activities can streamline the process and provide actionable insights. Building a long-term relationship, even if it doesn’t lead to immediate funding, can be beneficial for future rounds or referrals.

Make a Follow-Up Plan: Set up a simple way to keep track of your talks with investors. Use a computer program or a spreadsheet. Write down everything, like thank-you messages, updates, questions, and feedback. Set reminders to contact them again on time. Check How Well Follow-Ups Work: Often see if your follow-ups are working. Look at how investors react, like the feedback they give or if they want more meetings. Use this to make your follow-ups better. Mix with Other Steps: Add your follow-up steps to other important steps in raising money. This includes things like how many investors you first talked to, how many meetings you had, or how much money you got. This mix gives you a fuller picture of how well you're doing.

Evaluate the content and context of your communications, emphasizing the alignment of follow-up actions with your startup's milestones and the VC's expressed interests. This metric provides a qualitative measure of your ability to sustain meaningful dialogue, demonstrating not just persistence but a strategic approach in nurturing the evolving relationship.

All of them will follow up. Or get back. They are professional investors dealing with very rich and powerful people’s money! But your thing should have the potential to generate money.

Use introductions not only for fundraising but also for exploring strategic partnerships or mentorship opportunities. Assess which VCs are most beneficial in terms of providing valuable introductions and focus on strengthening these specific relationships. Combine the power of VC introductions with targeted marketing efforts to enhance the startup's visibility and credibility.

In my opinion the # of VCs introduced is the crucial one. If we take these metrics such a sales funnel from click to nurturing and finally adoption; I would rather this one as a baseline for conversion rate calculation. # of VCs interacted (hot or cold) / # of VCs introduced The main reason is everybody is depending on more or less other respected VCs since time is short and resources are scarce. If you get a mediocre or below perception from a single respectful VC, this information will spread across industry immensely and immediately. And your chances will start to drop exponentially. So keeping this conversion rate high may help either this round or one of the followings + keep you in the network with a A grade credit score.

Focus on solution-driven networking. Track connections by expertise and insight - the metrics that build relationships of real value for future funding success.

Go for all! Yes, more the better! Accepting feedback from VCs is also important. But remember, as an entrepreneur you are intrinsically alone and by yourself. If you cannot make a profit or survive on your own then your odds of a scaled up, funded success is very, very, very remote. So now both you and the VC/investors are relying on “ Luck “. By the way despite of what everyone successful telling you on Flanagan back mode, whether you like it or not, the single, biggest factor of success or wealth creation is LUCK!

Before reaching out to VCs, make sure they are investing out of a fund and not in fundraising mode. It doesn't hurt to get to know them regardless of fund status, be aware if they can invest based your fundraising timeline.

This is by far the most important metric - who are your coinvestors. Building trust on each others' diligence is critical. And ability to have a relationship that is not transactional goes a long way.

Tracking the number of successful investments and their returns helps gauge the network's financial performance. Monitoring the growth of the network in terms of the number of investors and portfolio companies showcases its expanding reach. Measuring the engagement and satisfaction levels of both investors and startups provides valuable insights into network dynamics and effectiveness.

The only real metric on the quality of your offer and your execution. I would say that number of VCs matter less than amount raised. Some founders thrive with hundred of angels while others will find it unbearable to communicate with them all. Some founders have a single family office backing them while others will find it too risky. Do what works for you personally!

This is the most powerful metric to assess the effectiveness of efforts to engage with VCs - a successful close. For founders who are fundraising for the first time, it takes one VC to believe in you and invest for others to follow suit as the industry is always watching what others are doing and always waiting for strong indicators of trust and credibility, securing funding being a strong indicator.

In general VC’s can make an impact. But also in general they are highly risk averse. They are putting a bet on you, finally. And because they are risk averse they loose up on most viable projects. Let me put it this way, if there success rate is less than 5 % their failure rate also will be statistically around 5 %. Think about it they have missed exactly the same number of companies which would have done statistically as well is their successful portfolio. No one talks about this?

Track the number of VCs who've remained engaged or supported you post-investment or fundraising round. This encompasses mentorship, advice, introductions, resources, or follow-on funding. The count of retained VCs gauges your satisfaction and loyalty levels, critical for nurturing and elevating relationships with VCs. However, it's crucial to recognize that this metric alone doesn't fully capture the durability or caliber of your network. To comprehensively assess your investors' feedback and satisfaction with your startup, monitor additional metrics reflecting their engagement and contentment.

Ideally your investors contribute more than funds to your company. They contribute their network of founders, CEOs of their portfolio companies, peer VCs, and possibly key opinion leaders in your niche. The more they help to derisk your company, facilitate the next fund raise, and guide your product market fit, the more valuable they are as a partner for you.

This is one of the most important metric you can measure from your VC, this reflects their quality and added-value rather than just their investment. The more active is a VC the more strategic and long term partner it could become. An intangible metric you can try to measure is the emotional connection a VC can establish with other investors you may have. After all, it's not all about the relationship between the VC and the company/founders but also the relationship between the VC and other VCs or investors. A VC with high NPS (net promoting score) will have higher chances of being retained.

To build a useful network you need to add value to your contacts. You need to contribute to them, intros, clients, fund raising, ideas and hard “no”s. Until you do this your contacts are just people you met. It’s different!

The areas of expertise of each VC and how well distributed is that number across the VC network that is being monitored. That will give the approximation of what is the state of the market and where the market is headed in respect to the sectors that the VCs are experts in.

Strongly disagree with all of the above. It's not about the number. It's about the influence and value. I focus on creating meaningful connection with few well connected and influential people in my industry. I track my interactions with them and make sure to keep track of all introductions and outcomes.

Fundraising can seem like a pure sales-like effort, and cold outreach is tempting. It is always best to try and find warm introductions, from those that know you and can speak to why they are excited about your company. These can be partners, team members, investors and advisors. Ask for intros before any cold outreach.

When building a VC network, it’s crucial to prioritize VCs focused on more than just growth and management fees. Look for those committed to sustainable development, creating profitable companies, and fostering a dignified workforce. Assess their credibility (ability to deliver promises), reliability (consistency in actions and ethics), and intimacy (offering mentoring and coaching). Avoid VCs with self-entitled attitudes. Opt for partners, whether large or small, global or regional, that are aligned with impactful, sustainable growth. These VCs not only enrich your network but also contribute significantly to technological and societal advancement, shaping a better future